New report questions business model of British Columbia gold mines

A position of nan Stikine River adjacent Petersburg. The stream is downstream of galore Canadian mines successful nan Alaska transboundary watershed. (Photo by Cindi Lagoudakis/KFSK)

Gold mines adjacent nan British Columbia separator are arguable successful Alaska because of nan imaginable for antagonistic impacts to nan situation and fisheries downstream. A nonprofit group called nan Environmental Investigation Agency (EIA) released a report successful January that recovered that these golden mines run somewhat for illustration a Ponzi scheme. 

The study says mines are allowing time traders and Canadian taxpayers to presume astir of nan financial consequence that comes pinch golden prospecting, while a overmuch smaller group of shareholders reaps nan rewards. KFSK’s Shelby Herbert has been pursuing this communicative successful Petersburg.

The pursuing transcript has been lightly edited for clarity.

Ava White: Shelby, what does this study opportunity astir really these mining companies operate?

Shelby Herbert: The EIA is reporting that there’s fundamentally a web of astir 500 companies that person nonstop aliases indirect stakes successful golden mining claims successful nan transboundary region. They usage thing called nan imaginable generator model, which is erstwhile inferior mining companies get onshore packages pinch bully prospects for gold, aliases different precious metals and minerals. Then they transportation retired nan first exploration work, to suss retired nan viability of nan excavation earlier nan drilling gets started.

In bid to excavation resources and dispersed retired nan risk, they’ll past activity retired joint-venture partnerships for nan claims. These partnerships springiness a awesome aliases mid-tier miner nan expertise to gain liking successful speech for backing drilling. 

This exemplary is utilized by mining companies each complete nan world. But nan authors of nan study person noted that mining operations successful nan transboundary region run for illustration nan imaginable generator exemplary connected steroids. 

Most of those companies successful nan region are publically traded, and really make very small revenue. The EIA study recovered that a batch of nan apical 20 claim-holding companies successful nan transboundary watershed region run astatine a shortage and mostly person a antagonistic inclination successful their banal price. 

AW: So really do they make immoderate money?

SH: Well, these companies surely make money. But their small-time investors? That’s a different story. 

According to nan report, nan companies successful this web are mostly funded by banal income from mini investors, time traders, non-professionals, folks for illustration that. And past they’re besides buoyed by taxation incentives. There are respective Canadian taxation incentives that greatly use mining companies, for illustration Flow-through Shares and nan Mineral Exploration Tax Credit.

So, nan exemplary does move a profit, moreover erstwhile they’re not turning retired overmuch gold. Owners and main investors are making millions of dollars a year, and utilizing it to drill hundreds of miles of caller holes.

AW: How galore of those mines really output gold?

SH: A fraction of a fraction. According to nan Association for Mining Exploration, only astir 1 successful 10,000 exploration projects really becomes a mine. And astir of that consequence falls to, for illustration I said, small-time investors and Canadian taxpayers. That’s why nan authors of this study are drafting a comparison to Ponzi schemes. I reached retired to galore of nan heavy-hitters successful nan British Columbia mining web to get their guidance to this comparison, but they ne'er sewage backmost to me. 

AW: Are location immoderate biology concerns astir simply drilling for gold? Even if nan prospectors ne'er find it?

SH: The study says that moreover nan boreholes that don’t go mines could wounded nan surrounding watershed. There isn’t a batch of published accusation connected nan nonstop biology impacts of mining exploration. But a 2019 study by nan biology group, Center for Science successful Public Participation, looked astatine nan effects of exploration astatine nan arguable Pebble Mine successful northwestern Alaska, and it gives america a small insight. Researchers recovered elevated levels of aluminum, iron, and copper successful aboveground h2o adjacent drilling sites. And immoderate of those exceeded h2o value standards. Dissolved copper besides happens to beryllium neurotoxic to salmon, and perchance prevents them from navigating backmost to their location streams.

AW: And what do nan mines mean for group downstream?

SH: It’s important to statement that a batch of these mines are really adjacent to watersheds that provender food habitat. Take a look astatine wherever I’m at, present successful Petersburg — Enduro Metals’ mining claims screen an area astir nan size of New York City. And astir 3 quarters of that area is wrong 3 miles of rivers aliases streams, including nan Iskut River — nan Stikine River’s largest tributary, which feeds into nan waters adjacent wherever I am. 

Several groups successful Southeast Alaska are concerned astir what contamination from nan mines intends for fish. That’s tricky to quantify, pinch different factors for illustration ambiance alteration and bycatch astatine play here. But by galore accounts, mines and food don’t mix. 

A study published successful 2022 successful nan diary Science Advances recovered a consistent shape of harm to salmon residence and watersheds from British Columbia mines. Groups for illustration SalmonState are concerned astir declining populations of salmon, arsenic good arsenic hooligan and trout. And Indigenous group successful Wrangell, Metlakatla, and Ketchikan person agelong talked astir nan changes they’ve seen successful food populations wherever these rivers meet nan ocean.

Also, astir 20 percent of nan existent claims that person been staked successful nan transboundary region are covered by glaciers. As those glaciers recede owed to ambiance change, they’ll time off down thousands of miles of new salmon streams. But nan food are successful nonstop title pinch nan mining companies, who are waiting to excavation into nan ground. 

AW: How are group successful nan sportfishing manufacture reacting to this?

SH: Commercial fishermen are immoderate of nan cardinal players successful campaigns to protect transboundary watersheds from excavation pollution, for illustration Salmon Beyond Borders. There are world treaties that govern this region, including nan Boundary Waters Treaty and nan Pacific Salmon Treaty. 

Heather Hardcastle is nan run advisor for Salmon Beyond Borders, which is 1 of nan organizations that commissioned this report. She told maine that commercialized and athletics fishermen, arsenic good arsenic subsistence users person been profoundly progressive pinch this rumor and looking for change, looking for diplomacy, and looking for answers from nan U.S. government. 

AW: And what are Alaska politicians doing astir this?

SH: U.S. Sen. Lisa Murkowski called connected President Biden past fall to withhold his support for Canadian mines until some countries tin found watershed protections for this region. 

But this has been a long, drawn retired fight. For adjacent to a decade, group successful Southeast Alaska person been asking for a region connected transboundary mining activity until Indigenous peoples and communities successful nan region tin found enforceable world protections for nan watersheds that dishonesty beneath nan mines.